What role does the public float definition play in determining the market cap of cryptocurrencies?

1 answers

• EnzoJan 23, 2024 · 2 years ago
  The public float definition is an important factor in determining the market cap of cryptocurrencies. Market cap is calculated by multiplying the circulating supply of a cryptocurrency by its current price. The public float represents the portion of the circulating supply that is available for trading on the market. It excludes coins held by the development team, early investors, or locked in smart contracts. The public float definition helps investors and traders assess the liquidity and market demand for a cryptocurrency. A larger public float generally indicates a higher market cap, as there is more supply available for trading. This can contribute to a cryptocurrency's perceived value and attractiveness to investors. However, it's important to note that market cap alone does not determine the success or potential of a cryptocurrency. Other factors such as technology, adoption, and market sentiment also play significant roles in shaping the market dynamics.
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